Efficient Disrribution of Building Mqteriqls

By S. M. VAN KIRK, General Manager, National Building Material Distributors Ass'n.

Irfhcicnt tlistrilrutiorr of lrrrilrlirrg rrrateriitls is of rtttnost ilrterest t() ()11r -\ssoci:r1iorr.;rnrl is olrc of the most itlpor tant prolrlems n()\\' fitcing the n-holcs:tle clistrilrutor :ttt<1 thc retail <lealer thronghout the cr.runtrr-. It is of primarv intercst to e;tch menrl.rer of ottr Associ:rtion ancl, scconcllv, it be:rrs on thc brortrl genentl cluestion of ccononrics u'hich is involr-etl. 'fherc has bccn too nruch loose thottght lLtrtl puLrlished c()nment otr thc hig'h cost of tlistrilrtrtiorr, thc great \\'astes of rlistribution, the rrseless nriddlc n.rar.r.

.\s our g'r()t1p is the nlLt'iona'l association conlrosecl r.rf thc "XIitlclle N{iLn," I uoulcl 1iltc first to revien'1rricll,r'ottr -'\ssocialior.r ar<l to tcll vott oi its ainrs an<l olrjcctivcs.

'l'he \utit.rnal Ilrrilcline Nlaterial l)istrilrutors .\ssocirttion frrrnrallr'' rcorgartizccl in -f trne oi 1952 u'ith a nuclcus oi 28 rvholcsale <listrilrutors. in its hrst 1l veArs (,f existcrrce gre\\'t() over 2.50 metnl>crs. Xlcrnlrershil) covcrs 39 states in this countrv anci Canacla,:tntl u'c anticip:ttc evctttual nrenrbcrship of lttlr.een .500-600 tlturlifietl n holes:rle clistribrrtors n'ithin the r.rcxt threc _vears. Statistics rlcvcloped lrv r.rur Associlrtion in<licate that our lverrtge nrctttlrcr h:ts litr annrr:rl s:r'les volrtme oI approximatclv $2 nrillion-trltr-els four s:rlcsmcn-has rr n'areltouse of upproxirrrlttcll' 32.000 s(lrlilrc icet- rrrrtl h:ts:rn averitil-c nrotrthl,r'itrvctttor-v oI ttvcr $175.000. Approxin.ratcll' 3.5,000 cnrloltrls oi lruiltlirre' rna1crials u'cre hrLnrllecl anrl soltl lrv ortr trtet-ulrcrs in 1().i(r. I'lach nremlrcr is rigidll. investig'rttcrl prior to :tcceptrtttcc, lrld it is <.rur llrnr lrclief tlritt all oi our nrcnrlrers Irrcet thc rcclrtircrnents :ts rlcvclopetl for rrcnrlrcrslrilr irr N IINTI)r\. I shorrltl adcl thzit irr 11)5(r, 23 :rpplicitnts \\-crc rejcctctl lrcc:tttse tl'rcv rlirl tr,)t lll('('t ')ur r('(ltlirenl(^ntS.

\\'hile N IIf,ID'\ perforn.ts thc tvpiczil :Lssoci:ttiotr Ittttctions, u'e have strcssetl cottperittir-e clltorts tr1 lroth tlrc nriLtrttfactttrcr antl retail lcvel att<l l'e itrc cr )tttitttlitt{ ,,ttr efl'orts to l<eep the manufacture r ancl thc rctlLil tlealcr iniornrecl oi the a(lvllntages of thc u-holcsltlc lrrrilrlitrg rrt;rtcri:rl tlistrilrutor in the ch:rirr of efficient <listrilrrrtior-r.

Nou', 2.i vears itgo thcre l'crc fe n- u holesale tlistrilrrrtors oi brrilding r.nrttcrials. '['hev have itrcrca-se11 itr trrttnlrcrs since thcre il'as thcrl (1()ul)t lln-lollg trlatlrti:tcturers:tlld tlcalers that thcrc \\':IS iI 1tlacc irr thc <lis1rilrutiot.r lrlttterrr ior therrr. It is rrru- l)rctt)- rrniversalll lLcceptc<1 that therc is, ar-rcl that the-y zrre ncccssary:rnd pcrform rL rlefinitc scrr'ice both for thc mzrnufltcturer anci the retail rlcaler. 'l'his is lt:rsicallv lrccause oi the nlur_\-m()rc liinds. size zrr<l cr.rlors that the retuil <lealer is non'callcrl rrpor-r to sLrppl_r'to his ctlst()nrcrs th:rt he c:rnrrot prolitablv carrv irr stock,:rrr<1 tlre freclrrcnt exh:rustiorr of his stock of iterns lre rlocs carrv regrrl:Lrlr-.'['hc rl-holcsalc tlistrilrLttor's u':rrchousc str.rcl<, therciore. is lr rescrr-oir for thc rct:ril dcalcr to rlrlrn'frorn.

Yorr nray lre intcrcstecl to knon' thiit onc grorrp o[ ][irl n estcrn clistrilrutors, cornprisir.rg 20 u'hr-,1c-'srLlers in rr radius of 75 rnilcs, in<licaterl lhut in -\ugr.rst their lrast cltte rrccotlnts :tmountccl to n'el1 r-rvcr $1 nrillion. lrcttcr th:rn $50.000 per rlistributor. Thesc rlistrilrutors, se lling primarill. to the rctail lurnlrer <lcrLler, arc \\-onrlcrir.rg if thev arc in thc irrrilding lnateriirl lrrrsincss or thc balrlting 'b115i1g5s-1"et on c1oser scrutir-ry u c foun<l th:it the retail dealer was financing the builder-ancl, ir lurr. \\'c arc ir\\'arc th:rl at:rtrrir nrtrrrriltclrrr('rs llre giving corrsicleralrle alltounts of crcdit to thc <listrilrrrtor-so you carr reaclilv appreciate thc comlrlexitv of nroclcrn clistrilrutir.e nrethods. From a sp,eech by S. M. Van Kirk to the Baton Rouge, La., chapter of the National Association of Home Builders, Oct. 4, 1956.

What are the factors that are essential if the wholesal,e distributor is to be an efficient operator ?

First, hc nlust c:rrn son'rc profit ior hinrself . lrr talkirrg u-ith hun<lrctls oi l'holcslLlers throughout thc corrntr,r'I hrivc nevcr fottrrrl orre u'ho <lisrrgrcccl n'ith th:rt statt'nrcnt thcoretical l v.

Second, for tlrc u'holcslrle distrilxrtor to lrc cllicicnt he t'r'tust servicc his sourccs of suppll' ar.rd his ret:rilcrs cqually as n'ell--rrnd, gcnerally speaking, morc che:tplv thtLrr thcv coulcl secttre thc sanrc <listrilnrtion lry other nrcans. Non', that is:L rather large orrler. lrrrt the l'l'rolesalcr c:Lnnot hope to :rchieve this olrjectivc u'ithout giving- ancl rcccivirrs. f r,rnr lroth thc manuiztctrrrcr ancl thc retail <lealcr. comolcte cooperation.

Coopcr:rtion nteiurs litcrally u'orking togethcr antl invol r-cs dutics an<l rcsporrsilrilities for lLll partics corr-